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A row is brewing between Ed Miliband and recruiters after the Labour leader said his party would amend the Agency Workers Regulations to outlaw pay between assignment contracts (PBA) to address “understandable fears” about immigration.
PBA, known as the “Swedish Derogation” under the 2010 Agency Workers Regulations (AWR) due to Sweden’s reliance on agency workers, exempts temporary workers from the right to equal employment rights as permanent staff after 12 weeks’ employment, as long as they are paid between contracts.
In a letter to the Independent on Sunday newspaper, Miliband wrote: “There is a loophole in the laws around agency work which allows firms to avoid paying agency workers at the same rates as directly-employed staff. This loophole is being used in sectors where levels of employment from aboard are high, such as food production, and now account for as many as one in six of those employed by agencies.”
Miliband said the next Labour government would “work with British business to close this loophole and ensure that agency workers cannot be used to undercut non-agency staff”.
He added that the British economy is currently “hard-wired into a cycle of low wages, low skills, insecure jobs and high prices”.
Chairman of the Association of Recruitment Consultancies, Adrian Marlowe, said that low pay is an issue but recruiters should not be made the scapegoats for this.
“Agencies take their instructions from hirers who set the payment agenda and want to keep down their employment overheads, and the law of supply and demand applies,” he said.
“Foreign labour is mainly facilitated by foreign agencies, not UK ones, and surely discrimination laws protect against selection based on race or nationality? Under the AWR agencies must ensure that their supplied workers are paid the same rates as comparably employees doing the same job. There is no equivalent rule for employees,” he added.
Marlowe quoted law firm Eversheds, which has reported that 83% of employers don’t use the Swedish Derogation arrangements adding, “so the vast majority of agency workers are likely to have the pay rights which the Labour government fought to obtain and are therefore better off in terms of pay rights than their employee counterparts”.
Chief executive of the Recruitment and Employment Confederation Kevin Green added that it was misleading for Ed Miliband to refer to PBA as a “loophole” or anything to do with immigration.
“These arrangements are part of the 2010 Agency Workers Regulations that were agreed following consultation between the last Labour government, businesses, and the unions and apply to British and non-British workers,” he added.
“Workers on PBA contracts are employed by their agency on a permanent basis, giving them greater security and all the benefits that come with permanent work such as protection from unfair dismissal, maternity leave and statutory redundancy pay.
“Is the Labour Party really saying they want to deny British temps the option of permanent employment?”
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